Compliance Monthly Update: December 2022
A brief update on what happened the prior month in group health plan compliance at the federal level, organized chronologically. If you would like additional information, please reach out to the GBS Compliance Team.
Links to further resources can be found in the PDFs at the bottom of this post.
New HIPAA guidance on the use of online tracking technologies.
On December 1, HHS issued a bulletin and news release to highlight the obligation on HIPAA covered entities and business associates (regulated entities) when using online tracking technologies that collect and analyze information about how internet users interact with a regulated entity’s website or mobile app. According to HHS, regulated entities are not permitted to use tracking technologies in a manner that would result in impermissible disclosures of electronic protected health information (ePHI) to tracking technology vendors or result in any other violations of the HIPAA Rules. Regulated entities should (among other things) ensure that all disclosures of ePHI to tracking technology vendors are specifically permitted by the HIPAA rules, enter into business associate agreements with tracking technology vendors when the information collected includes ePHI, and implement appropriate safeguards to protect ePHI.
Guidance for mobile health app developers.
Separate but related to the above HIPAA guidance, the Federal Trade Commission (FTC), in cooperation with HHS, issued a Mobile Health App Developers: FTC Best Practices guide and Mobile Health App Interactive Tool. The guidance and tool are to help anyone working with or developing a mobile app that will access, collect, share, use, or maintain individual health information (including PHI)—and help them comply with HIPAA and other related federal laws and regulations.
2022 Form 5500 released.
The DOL, IRS, and Pension Benefit Guaranty Corporation (PBGC) issued a news release and the 2022 Form 5500 series and instructions. The substantive revisions for the 2022 5500 forms reflect IRC and ERISA amendments made by the SECURE Act which are mostly relevant to 401k plans.
Another appellate court blocks enforcement of ACA Section 1557 provisions against Catholic entities.
Agreeing with a recent decision by the 5th Circuit, the 8th Circuit on December 9 upheld a permanent injunction prohibiting HHS from requiring a coalition of Catholic Church entities to perform or provide insurance coverage for gender-transition procedures because it violates the Religious Freedom Restoration Act (RFRA) and is a substantial burden on the entities’ exercise of religion.
Benefit and payment parameters for 2024 benefit year.
On December 12, HHS issued a fact sheet and proposed regulations containing a variety payment parameters and insurance market proposals. HHS also issued a memo announcing the maximum annual limitations on cost sharing for the 2024 benefit year for non-grandfathered plans under the ACA.
- 2024 annual cost-sharing limits. The maximum annual limit on cost-sharing under the ACA for 2024 will increase to $9,450 for self-only coverage and $18,900 for other than self-only coverage (2023 limits are $9,100 and $18,200). In general, cost-sharing includes deductibles, coinsurance, copayments, and any other required expenditure that is a qualified medical expense with respect to essential health benefits covered under the plan.
- Exchange enrollment periods. Beginning in 2024, it is proposed that Exchanges will have the option to implement a new special enrollment for individuals losing Medicaid or CHIP coverage, giving 60 days before or 90 days after a loss of Medicaid/CHIP to select an Exchange plan. Another proposal would allow earlier effective dates of Exchange coverage for individuals attesting to a future loss of minimum essential coverage.
Respect for Marriage Act codifies recognition of same-sex marriage and repeals the Defense of Marriage Act.
On December 13, President Biden signed into law the Respect for Marriage Act (The Act) requiring federal and state governments to recognize same-sex marriages and formally repeals the Defense of Marriage Act (DOMA). Previously in 2013, the U.S. Supreme Court held in Windsor that DOMA’s limitation of federal recognition of marriage to opposite-sex spouses was unconstitutional. In 2015, the Supreme Court ruled in Obergefell that all states must allow same-sex couples to marry and must recognize same-sex marriages lawfully performed in other jurisdictions. The Act codifies portions of these two Supreme Court decisions and also prohibits states from refusing to recognize marriages that were legally entered into in other states on the basis of race, ethnicity, or national origin. The Act is essentially symbolic, and the key provisions will become relevant only if the Supreme Court were to overturn Windsor or Obergefell. The Act states that it does not diminish or abrogate religious liberty and conscience protections otherwise available under the Constitution and specifies that nonprofit religious organizations will not be required to provide services or accommodations for the solemnization or celebration of a marriage. Bottom line is that married same-sex couples will continue to receive the rights and privileges of marriage granted by the federal government—including many rights under employee benefit plans that are tied to marital status, such as favorable tax treatment for employer-provided spousal health coverage and rights under COBRA and HIPAA.
Final regulations permanently extend ACA reporting deadlines.
On December 15, the IRS published final regulations addressing extended deadlines for ACA information reporting requirements. As a reminder, Forms 1094-B and 1095-B are filed by minimum essential coverage (MEC) providers—insurers, government-sponsored programs, and some self-insuring employers and others—to report coverage information in accordance with IRC Section 6055. Forms 1094-C and 1095-C are filed by applicable large employers (ALEs) to provide information that the IRS needs to administer employer shared responsibility penalties and eligibility for premium tax credits, as required under IRC Section 6056.
- The regulations permanently extend the deadline for furnishing a given year’s Forms 1095-B and 1095-C to individuals until 30 days after January 31 of the immediately following year (or the next business day, if the 30th day falls on a Saturday, Sunday, or legal holiday). The extension replaces the 30-day extension that could be requested for good cause, and the IRS’s ability to provide blanket automatic extensions. Note the annual deadline for filing returns with the IRS is not impacted.
- The regulations eliminate the transitional good faith relief from penalties for reporting incorrect or incomplete information for tax years 2021 and beyond.
- Lastly, the final rule confirms the availability of an alternate method for furnishing statements to individuals under Section 6055 for every year in which the individual mandate penalty is zero. Under this relief, employers generally will only have to provide Form 1095-B to covered individuals upon request if certain conditions are satisfied.
Final ACA reporting instructions available.
The IRS released final instructions for ACA reporting forms for 2022. The final forms (and draft instructions) were previously released in October. The final Instructions for Forms 1094-B and 1095-B and Instructions for Forms 1094-C and 1095-C are essentially unchanged from last year but reflect the extended deadline for furnishing forms to individuals from January 31, 2023 to March 2, 2023 (discussed above). The deadline to file returns with the IRS is February 28, 2023 (or March 31, 2023, if filing electronically).
Indexing factor to calculate No Surprises Act’s QPAs for 2023 released.
IRS Notice 2023-4 was released on December 20 and provides the indexing factor to be used by group health plans and insurers to calculate the qualifying payment amount (QPA) under the No Surprises Act (NSA). Insurers and those responsible for calculating QPAs on behalf of group health plans should take note of this guidance.
RxDC reporting relief.
On December 23, the DOL, IRS, and HHS issued welcome guidance providing good faith compliance relief and a grace period for filing until January 31, 2023, for group health plans and issuers subject to new prescription drug data collection (RxDC) requirements under the Consolidated Appropriations Act of 2021 (CAA). The reporting relief applies to the initial 2020 and 2021 refence year RxDC submissions that was originally due December 27, 2022. If the 2020 and 2021 reference year submissions are completed by January 31, 2023, the plan will not be out of compliance with the RxDC reporting requirements. The guidance also says that the regulatory agencies will not take enforcement action against a plan or issuer that uses a good faith, reasonable interpretation of the regulations and reporting instructions in making its submissions. This relief only applies to 2020 and 2021 reference year reporting and any possible extension of this relief for subsequent years will be communicated in advance of those future deadlines. The next RxDC reporting deadline will be June 1, 2023, for the 2022 reference year.
Telehealth and HSA relief extended with end of year omnibus spending bill.
On December 27, President Biden signed the Consolidated Appropriates Act of 2023 (CAA 2023) that includes a two-year extension of COVID-era telehealth flexibility for HSA-eligible plans and other health/retirement provisions.
- The legislation extends through plan years beginning in 2024 the telehealth safe harbor originally provided in the 2020 CARES Act and in the 2022 Consolidated Appropriations Act that was set to expire on December 31, 2022. With the CAA 2023 extension, the telehealth safe harbor will now expire on December 31, 2024, for calendar-year plans (later for non-calendar-year plans). Specifically, the safe harbor provides that a HDHP can temporarily cover telehealth and other remote care services on a pre-deductible basis, and an individual can have stand-alone coverage for telehealth and other remote care services pre-deductible without impacting their ability to contribute to an HSA.
- CAA 2023 also includes, among many other things, (1) SECURE 2.0 retirement legislation (building upon the SECURE Act of 2019) that includes 401k and retirement plan provisions such as expanding automatic enrollment in 401k plans, increasing the age for required minimum distributions, and adjustments to catch-up limits; (2) PUMP for Nursing Mothers Act which expands employee access to space and break time breastfeeding accommodations in the workplace; and (3) Pregnant Workers Fairness Act which requires accommodations for pregnancy, childbirth or related medical conditions of an employee.
HHS issues new strengthened conscience and religious nondiscrimination proposed rule.
On December 29, HHS announced a Notice of Proposed Rulemaking (NPRM) entitled “Safeguarding the Rights of Conscience as Protected by Federal Statutes”, which proposes to restore the longstanding process for the handling of conscience complaints and provide additional safeguards to protect against conscience and religious discrimination, particularly for individuals who are seeking or providing care.